Market Recap: How do you like them rallies? Well today we went straight up almost in a perfect 45 degree line. In the after hours session we hit a high of 129.94 as the market seemed determined to run over everyone and everything in its way. Again the volume was anemic as it appeared there was little selling resistance for the bulls to chew through. In the process SPY busted through the 20 SMA and almost hit 130 which coincides with the 38.2% fib. We're still in a 4 point range (126-130).
Tech has now broken out of it's up channel and 20 SMA. Small caps continue to lead and are now only a hop, skip and a jump away from the 50 SMA but still within a rising channel.
The dollar continued it's march back to 75 or the bottom of range but finished the day right smack in the middle around 75.50. I'm not sure where the dollar is headed into the end of the week but regardless the bulls didn't seem to care it was risk "on" all day. Copper is still trending sideways awaiting Chinese PMI.
Where do we go from here and what could derail the rally?
Pay attention to the 2 big global macro events we have this week: Greece austerity vote and Chinese PMI. As well as US econ news with pending home sales tomorrow at 10 AM EST, initial claims and Chicago PMI on Thursday at 8:30 and 9:45 AM EST respectively and Michigan sentiment and ISM on Friday at 10 AM.
I'm not sure what could happen tomorrow but if I had to make a call I'd say that 130 holds and we see a minor sell-off tomorrow. What I'd like to see is for us to completely fill the bowl formation over the next few days that's setting up on the SPY 30 minute and then let's see if funds feel like putting on more risk post-4th of July. But as the Rolling Stones said "you can't always get what you want but if you try sometimes you just might find you get what you need"
1. Greece austerity vote tomorrow 06/29/11 which even if it passes successfully we may see a buy the rumor sell the news event: http://www.bloomberg.com/news/2011-06-28/papandreou-races-to-avert-greek-default-as-protests-besiege-austerity-vote.html
2. Chinese PMI on 06/30/11: http://www.businessinsider.com/why-things-may-be-about-to-get-brutal-for-dr-copper-2011-6
3. US econ calendar: http://finviz.com/calendar.ashx
Long bond (ZB_F)
JNK v. LQD